Savills Vietnam would like to announce Savills Property Price Index (SPPI) in May 2019 for Ho Chi Minh City (HCMC) and Hanoi with highlighted information as below:

HCMC

Residential Index

In Q1/2019, the Savills Residential Index was 95.4, stable quarter-on-quarter (QoQ) and up 1 point year-on-year (YoY).

Residential QoQ Index – HCMC

Total transaction volume was 6,900, down -37% QoQ and -49% YoY, caused by lengthy period of national holiday in January and February. Absorption of 52%, down -8 ppts QoQ but up 4 ppts YoY.

All grades recorded a drop in total transactions. Grade C remained the highest contributor, representing 58% of total transaction volume. 

Until 2021, over 163,000 units are expected to launch; Districts 2 and 9 will account for 57% of future supply.

Office Index

In Q1/2019, the Office Index reached 102, up 2 points QoQ and 9 points YoY. Improvements were due to quarterly increases in rent in both CBD and non-CBD. 

Office QoQ Index – HCMC

The CBD continued to outperform the non-CBD with occupancy reached 98%, stable QoQ and 1 ppt YoY and rent grew 2% QoQ and 10% YoY. 

The CBD index increased to 107, up 3 ppts QoQ and 11 ppts YoY. The non-CBD office index reached 107, up 1 point QoQ and 7 points YoY. The increase of office index of both the CBD and the non-CBD was due to the QoQ increase in average rent.

Total take-up was over 7,600 m2, down -22% QoQ and -87% YoY due to low vacancy in Grade A and B.

Hanoi

Residential Index

In Q1/2019, The Residential Index increased by approximately 1 point (pt) quarter-on-quarter (QoQ) and 3 pts year-on-year (YoY) to 107.2.

Residential QoQ Index – Hanoi

Total transaction volume increased 70% YoY but decreased -14% QoQ. The average absorption rate was 29%, down -3 ppts QoQ but up 4 ppts YoY.

Strong demand resulted in high Grade B sales, accounting for a 70% market share and growth of 99% YoY, the highest amongst the three grades.

Approximately 44,000 units from 34 existing and future projects will enter. With rapid infrastructure development in Gia Lam and Tu Liem districts, strong competition is expected. 

Office Index

In Q1/2019, the Office Index was 69.6 pts, stable QoQ and up 2 pts YoY as rent increased 2% QoQ and 5% YoY.  

Office QoQ Index – Hanoi

The CBD index fell by -3 pts QoQ and -1 pts YoY, due to the soft performance of newly launched projects. The non-CBD index was stable QoQ and up 3 pts YoY.

One project in the CBD will come online in 2020, increasing rent.  A surge of new non-CBD supply suggests a dynamic market in the future.

Office buildings of higher grades in the non-CBD are attractive to occupiers, including those relocating from the CBD.

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